Is Pakistan overselling CPEC?

[武成王]

Why most Indian desperately bash on CPEC ? Not necessary. If Pakistan become unstable, it will be nightmare for India.

The following is GDP growth rate comparison of India and Pakistan from 2007 - 2015:

First row is year, second row is India data, third row is Pakistan data. We can see the growth rate has a gap between India and Pakistan, vary from 2%-5%, if this trend continue, plus regarding the size of economy, the absolute gap between Pakistan and India will grow very fast in the future if Pakistan could not catch up in short time. Pakistan need grow at 8% or even 10% to close the gap as much as possible, otherwise it will be a big challenge to stability of society and national security.

 

[S.Y.A]

Good to see an honest reply. I always considered the whole OBOR project is much more about infrastructure business for China to utilize its overcapacity leading to NPA, than a genuine trade route.

that is good for us, we would not have been able to afford the cost of building motorways, railway up-gradation and the dams that are being built without Chinese help(both financial and material).

 

[PakSword]

An Indian starting a CPEC thread.. and a lot of Indians discussing the pros and cons and asking Pakistanis to be cautious.

The feeling is priceless. I don't care if CPEC is successful or not, I just want to enjoy this moment..

 

[VCheng]

that is good for us, we would not have been able to afford the cost of building motorways, railway up-gradation and the dams that are being built without Chinese help(both financial and material).

Does taking on more debt somehow makes such projects more affordable or merely pushes the costs to the future, plus interest?

 

[S.Y.A]

Does taking on more debt somehow make such projects more affordable or merely pushes the costs to the future, plus interest?

the original dams were financed through loans too, and what would you suggest we rather do? wait for billions of $ to somehow drop in our laps from the sky and then build them?

 

[VCheng]

the original dams were financed through loans too, and what would you suggest we rather do? wait for billions of $ to somehow drop in our laps from the sky and then build them?

So taking on more debt does not make any project affordable for a country. The key is to develop the ability to repay those loans. Pakistan's history shows that it is caught in a debt trap where more loans are taken out to repay the older ones while interest piles up even more, while the promises of huge returns from such grandiose projects remain just that - promises. Will CPEC be any different? Only time will tell.

http://labs1.tribune.com.pk/the-express-tribune-explains-foreign-debt/

 

[武成王]

Three things mainly.

The first is finding an outlet for China's industrial overcapacity, for example in steel and cement. The second of course, is the age old reason of profit. The third reason is to gain additional diplomatic favor with the decision makers in the Pakistani government, both present and future.

In my opinion.

First, the world average of steel exports to output is 30%, compared with less than 15% in China. For cement, in 2015 global cement output is 4.1 billion tons, China exported less than 10 million tons. Not valid point, not to mention China already restrict and limit output of steel and cement, the main benefit is to export various machines or standard, e.g. railway. Second, the profit of oversea infrastructure projects is very low, often lost due to corruption or unstable political environment, lots of such cases. Many countries sign these projects with China because China is experienced and has a remarkable COST CONTROL and HIGH SPEED DELIVERY reputation which lead to a very competitive price compared with western rivals. Most projects are politics driven, or have a long term vision, short term return is not very satisfying. Infrastructures can help local economy, the growth of local economy will create demands for goods Made In China, it's an ecosystem building in long term. Third, partly true. For Pakistan case, it's better to invest earlier than has to pour much more money later.

 

[S.Y.A]

So taking on more debt does not make any project affordable for a country. The key is to develop the ability to repay those loans. Pakistan's history shows that it is caught in a debt trap where more loans are taken out to repay the older ones while interest piles up even more, while the promises of huge returns from such grandiose projects remain just that - promises. Will CPEC be any different? Only time will tell.

http://labs1.tribune.com.pk/the-express-tribune-explains-foreign-debt/

no country in the world is free of debt(excluding some though, but they can be counted on fingers). the thing is either suffer drought, no electricity at all, rather than just load shedding, and completely end Pakistan, or take loans and survive. simple as that.

 

[Thorough Pro]

Whether it does or does not, why are 1.3 billion Indians obsessed with it?

I think you should ban Dawn for making false accusations. The report is from Dawn.


If you think CPEC would catapult you guys into one of the worlds largest economy, then good luck with that.

 

[VCheng]

no country in the world is free of debt(excluding some though, but they can be counted on fingers). the thing is either suffer drought, no electricity at all, rather than just load shedding, and completely end Pakistan, or take loans and survive. simple as that.

As I said before, only time will tell:

https://defence.pk/pdf/threads/pakistan-adds-over-rs36-000b-to-already-growing-debt.496398/

 

[nang2]

Ahh roads and railways like British colonials?
You are building them because you are goIng to use them, you are trying to change Pakistani administration and culture to make it a Chinese province.
Yes buying Pakistani agricultural lands, textiles and resources and building them roads and buildings in return. Basically sucking every thing from the region and impose Chinese rules and culture add to that creating animosity between countries in South Asia.

Chinese bluff has been exposed by the dawn report.

Srilanka sold their airport and are paying debts, Tajikistan sold their thousands of acres in debt and now its is Pakistani turn.

There are many examples in Africa as well.

I think you got the order wrong. Colonization usually starts with armed invasion, not investment. I thought as an Indian, you should know the British colonization history in India well. Did British start the process by building roads, dams and hospitals in India?

 

[ckf]

A lot can be said , may be possible or might be huge opportunity.

But the fact is China is not doing charity. We have seen it before in Sri Lanka / Tazikistan. The way CPEC will come out will definitely secure Chinese interests (profits)

Now for Pakistan its debt and world class infrastructure. It all depends on how Pakistan as a nation can churn that infrastructure development in her favor. It will work if Pak is able to generate benefits greater than debt due to CPEC.

However, history tells us (Sri Lanka/ Tazikistan) that its only one party (CHINA) which benefits and second party ends up in debt trap.

You shouldn't talk about history...Sri Lanka has 60 billion debt through ADB, IMF, foreign corps and only 8 billion from China, Indians are being brainwashed by Western Media...only china offered lower interest rate, and debt relief.

 

[Chhatrapati]

Whether it does or does not, why are 1.3 billion Indians obsessed with it?

I was just quoting the news from your agency. Don't shoot the messenger.

And please spare me the BS of Indians quoting a news related to Pakistan, it's a two way bridge. You too jump into discussions relating to India, even in Indian internal affairs. Are you guys obsessed with India?

 

[dray]

that is good for us, we would not have been able to afford the cost of building motorways, railway up-gradation and the dams that are being built without Chinese help(both financial and material).

Why not? It's not free...Pakistan is paying through its nose! Have you checked the unusually high interest rate Pakistan is paying for every penny of Chinese loan? It's not Chinese investment, it's purely a loan that Pakistan has to pay back with interest. In fact Pakistan could have looked for a competitive bidding for the projects and loans from multiple countries/entities as the cost and investment risks are entirely being borne by Pakistan.

 

[S.Y.A]

Why not? It's not free...Pakistan is paying through its nose! Have you checked the unusually high interest rate Pakistan is paying for every penny of Chinese loan? It's not Chinese investment, it's purely a loan that Pakistan has to pay back with interest. In fact Pakistan could have looked for a competitive bidding for the projects and loans from multiple countries/entities as the cost and investment risks are entirely being borne by Pakistan.

so loans from the WB and the IMF are alright, but not from China?

Have you checked the unusually high interest rate Pakistan is paying for every penny of Chinese loan?

2% interest rate

and again, wth has it got to do with an indian or india? why are you so worried?